To address the chattering problem caused by the discontinuity of the sign function in traditional sliding mode observers (SMO) for Permanent Magnet Synchronous Motors (PMSM) in flywheel energy storage systems (FESS), and to reduce the complexity introduced by low-pass filter and phase compensation elements, this paper proposes a novel speed observer, the improved super-twisting sliding mode observer (STSMO). By replacing the switching function in the super-twisting sliding mode observer with a sigmoid function, the discontinuity of the system is improved, effectively suppressing torque ripple and reducing the inherent chattering of sliding modes. This approach enhances the extended back electromotive force (EMF) estimation performance in both low-speed and high-speed regions, enabling precise rotor position estimation across a wide speed range and reducing both speed and rotor position estimation errors. Comparative simulations of the improved STSMO and traditional SMO based on SiC MOSFET inverter constructed in MATLAB demonstrate that the improved STSMO exhibits superior dynamic performance and rotor position estimation accuracy, significantly enhancing the control performance of PMSMs in flywheel energy storage systems.